 Thank you very much for joining us this afternoon, everybody. It is with great pleasure that I introduce Mr. Nakanishi, the Chairman and CEO of Hitachi Corporation of Japan. Today, the Japanese diet approved a policy framework dubbed Society 5.0, which is extremely appropriate for us here at the World Economic Forum, given that the theme of our meeting is Mastering the Fourth Industrial Revolution. Mr. Nakanishi will give us a briefing on Society 5.0, and then we'll have a discussion, and I very much look forward to welcoming questions from you in just a minute. Thank you very much, Michael. And it's a great opportunity for me to have this kind of the presentations. Coming back to the World Economic Forum's program, the program pillars the consisting of the three important items. That is the first one is Mastering the Fourth Industrial Revolution, that is the most important items. But the second one is Adversing Global Security Issues, and the third one is Solving Problems of the Global Commons. Those three are not independent items or subjects. They are fully related to each other because all of the issues are very much complicated, closely related. That's the background of we need some kind of the different thinking way, or taking of the process to that. But to go back to the Fourth Industrial Revolution, the basic technology might be the IoT or big data, and those kind of the information technology allows us monitoring the various and social phenomena very carefully, and that kind of the big data handings may show the future directions, what the solution is. Those kind of things is one thing to scoping up the global security or some of the global common problems issues. So today we would like to propose to extend such approach, such capability for solving the many of the social issues, not only for the manufacturing industry only, but also that sounds so complicated the social issues. So we would like to call the future society as society 5.0. Why 5? The first is hunting, the second is agriculture, the third is industrialized society, and fourth is usually that information society, but now fifth is not simply about information, not simply of the industrialized, it's a combined to the super smart society, so we would like to call it society 5.0. The current social problems is sometimes very complicated total schemes, the yesterday's sessions I had transformation of the energy, that's also the very typical example, the electric grid behavior will change because of the some environmental considerations of the so many that renewables, highly distributed of the power sources, it's also that more complicated demand side management is required. The total electric grid behaviors are changing, so that conventional electric grid is a huge electric power stations delivering of the every consumer side, but now the recent complexity of the electricity requires so many the detecting of the every phenomenon of the grid, otherwise the sudden blackout or the very unstable electric conditions, that's a typical example. The looking back to the urbanizations, the recent urbanizations used to be the humankind spend 100 years to build up the medium population of the cities, but the recent emerging countries within the 10 or 20 years setting up the medium populations, that causes so many issues, so that such kind of the other, the very rapid development of the urbanizations is requires monitoring of the population, energy, transportation, not only the such infrastructure, but also that education, healthcare and housing, those kind of the other well designed approach is required. In this case, the monitoring power, IoT, the big data is really that the strong tools for the futures. Well, let the Hitachi group as a focus on the social innovation business since 2010, just after the Rime Shop, that means that social infrastructures designed by the various such kind of the schemes, the IT and OT, IT means that information technology, but also operation technology is combined with to set up the most appropriate environment for the some infrastructures. So that we made several success in several regions, countries, but however we seriously recognized that such activities cannot be done by ourselves only. The various collaborations is required to set up such kind of the more complicated development work for the society. So the today, all of you that have already the several of the brochures is very simple two pages here and the very important three items that we need to approach for that. The first one is the open innovation and the second one is the collaborative creation. The to approach of the other real issues to set up the real solutions, the collaboration is very, very important activities for us. And finally, the service platforms is kind of how to find the real solutions for that. Those kind of things is our approach. So in Japan, we have had discussions on such activities with the various collaborative relationship buildings, not only the industry, but also the government and academic background, how to combine those kind of the collaborative creation stages for the future of Japan. Today already the Michaels introduced that the Japanese government announced of the fifth science and technology basic development plan today, just today. And that's the society 5.0 is a core part of this basic plan. And Japan would like to contribute to the more sophisticated solution provider to the world. That's the very basic plan for the Japanese future industry and the business and also the policies. So today, I would like to introduce of this type of the concept will be shown in this homepage here. So that's today, I would like to explain of the society 5.0 is a fully strictly related to the mastering of the fourth industrial revolutions, the main subject of this world economy forum, annual meeting. Thank you. Thank you very much. In the brochure here, one of the things that features very prominently is the fusing of cyberspace with physical space using information technology. Can you talk a little bit about some examples of how this is happening? Currently, the important subject for setting up this type of the platforms, how to make it available to the very useful database or big data itself. Of course, the big data issues are sometimes related to some privacy or security or so many things is kind of the negative portion of this activity. So how to manage those kind of things very secure way and also the endorsement of the government is required. So the platform means that not simply of the technology platforms, but also some social base which kind of the big data can be utilized and the extending of such a database to combine with the various environment. And in the context of the Japanese government announcement today, how do you think that will change the government's thinking about, how will the government's thinking evolve around investing in research and development? Of course, the science and technology-based plans include not simply of the technical issues is how to make a clear world for the Japanese industrial business environment as well. So the setting up some of the budget planning will be based on each year's budget plans, some of the year's budget planning, so those kinds of things. But now we set up the five years long term, relatively long term of the concept and the long term of the way directions is already shown in this plan. So what I want to say is that the real planning of the government and the private sectors and the academic, the making a clear difference to this plan and break down its each year's approach. I see. So it's a very long term view as we know in the days of the Fourth Industrial Revolution it's very difficult to see far ahead. So it's, can you explain how taking that longer term view will help reduce unpredictability? This is, you know, still a lot of things to be done to setting up the real plans. But now, already I explained the two important keywords, open innovation, and the other is collaborative creations. Those two is not in detail yet, but those two keywords is the creating of the, another platform for the society. They're completely different from the technology issues. It's a kind of the political approach to making a more open innovation and also that how to create the collaborative work to setting up the future stage of the, for example, the healthcare, how to manage the total cost, and setting up the various rules that sometimes requires our own lifestyle change. How do you see Hitachi changing as a result of these ideas as a company? Already we made a big effort to create such a social innovation business, but now the Hitachi is a very typical manufacturing industry. So our employees, our colleagues, tend to think that our technology is the most advanced or our solution is one of the best of the world. No, no, no. Before that we need to understand what the problems, what the issues to be solved and how to arrange the approach, not only by us, but also some other partners. Those kind of the different approach is required to setting up this business environment. It's not so easy approach from the viewpoint of the typical manufacturing industry conventional way. Yes, because the conventional way is to focus on selling your own products at the expense of those of your competitors, whereas with this open innovation and collaborative creation, you're looking to pick the best from everywhere and pull it together to the profit of all. And also that the current way that we are making big effort to the real tools to share of the issue. Because of the, in this case, in many cases the customer does not understand what the real issue is. Sometimes more complicated situations. Excuse me, I've already touched on some of the urbanizations. The planner of the urbanization requires so many the excellent experts, understandings of everything. It's very hard to find such a planner so that we need more collaborative creations to setting up the real development stage for the future of the cities. Those kinds of things is also required for that. So the big challenge, and especially the emerging countries, the government organizations and also the financial planning, so that somewhat the different type of the business model to be developed. Very good. So with that I might open questions to the floor. Who's going to ask the first question to Mr Nakanishi? In that case. This young lady here please. Hi, I'm Su Chan from the Telegraph in London. Japan faces some pretty unique demographic challenges. How do you think your country will master the fourth industrial revolution? How can it take advantage of all the things that we've seen here? Today I explained the industry 4.0 that's proposed by the German society. It's very much in the focus on the manufacturing industry, especially the automotive industry. That's a typical example for that. Today I explained that's one of the examples. More of the complicated social issues solution business is kind of the future of Japan. The Japanese government used to be promoting or exporting of the infrastructure to the emerging country. No, no, no, that's a simple exporting activity. It's no more feasible. We need to understand what's the real requirement of the emerging countries or emerging regions to setting up the more, you know, dream for the futures for each emerging country. That is how to share of such the blueprint for the futures. Those kind of activities is really that requires for us. That's kind of the Japanese strategy for the future Japanese economy. Those kind of things are part of this society 5.0. I'm now promoting of these type of activities. Not only internal Hitachi but also all of the Japanese partners. But sometimes not only the Japanese. That's our personal experience that simple exporting of the something, sometimes not the solutions. Oh, that's a good product. But I do not want to use it. Those kind of things may happen in many cases. Especially the complicated, for example, the railway systems. What the other passengers expect is fully dependent on the lifestyle. So we may have the different type of solutions. Setting up the train itself is a very typical product oriented approach. But how to set up the total transportation way in that country, in that city. Those kind of approaches are required. That's the Japanese advantage to setting up the new business environment. I believe this gentleman, he had a question. Thank you. Hello, my name is Katsu Hikahara from Nikke. Two days ago UBS issued a report about the forest industrial revolution saying that it will take the advantage and away from the emerging countries now that you don't have to make clients in emerging countries in search of cheap labor. Do you think that is the case? And maybe Hitachi will not have to go abroad to make products. You can just make them all in Japan or elsewhere in the industrial nations. Yeah, that's the more complicated questions because of the recent 10 years or 5 years. The Japanese industry gave up the commodity products business. Even though there are some of the mass production business schemes, some very much the specific materials or components, that cannot be the other countries cannot do. Those types of business are only feasible. So in this case, not as simple as I noted. That's a factory, how to serve it. There's really such kind of advanced products. Requires the more deep understanding of the end users or the customers. So the industry 4.0, the very strong tools to setting up the more complicated business model from the viewpoint of the manufacturing industry as well. So that's kind of fully dependent on the market. So the industry 4.0 is kind of the other way to adjusting of the business model to more market oriented. Hi, hello. I'm Chen from Sena, China. I would like to know in this forum, we heard a lot about how the industry 4.0 will affect our life. And the people say that might be destroys middle class or maybe damage the low income people. Do you think that would be the case in Japan as well? Thank you. In Japan, some part are different in a social phenomenon. Population is decreasing. And young laborers is really the facing of some of the different working environment. So already that we had to give up some of the commodity productions already. So we don't have any such kind of the blue-colored candidates. So the more complicated, each country has its own working environment and the populations. So why I'm talking about those kind of things is that one reason is that very simply, the very much of such kind of the IoT or artificial intelligence, eliminate of the job opportunity, the conflict of the job environment, those kind of things, people tend to think that, but more complicated social issues exist. In case of Japan, we don't have any such kind of the labor issues at all. We are really that want to have more blue-colored, but we cannot do that. That's the current situation. But now, still there are very serious issues, educations. How to make it more that younger people are encouraging to challenge of the high level of the jobs. Just as a follow-on question from that. How do you see the fitness for purpose of our education systems, Japan's education system in particular? Is it producing the kind of skills and thinking that you will need it as you tackle the fourth industrial revolution? Yeah, that's not strictly related to the industry 4.0. That's how to encourage the younger people more of the aggressive challenge for the future. That's kind of the very basic education schemes for the future younger generation. We have very serious discussions about the current Japanese university level is okay or not, and how they are setting up the more middle level of the education system is on the profit. At the time of the high-growth rate society, that is 1980 or 1990, the students are always getting some of the acceptance of the universities and the acceptance of the various hard training for the international examinations. But the recent younger people, oh, I don't like it. How can you encourage such younger people to setting up the more attractive school environment? Attractive is not an easy way. It's really how to encourage the younger people to learn a lot. Yeah, indeed. Any more questions from the floor? Mr. Nakashin, you are from my generation. You have seen Japan going from number two in the world, the GDP economy to number three. How do you see the future 20 years from now? And what kind of advice would you give the young generation that is coming? We cannot stop the globalization of the economy, and we cannot stop the digitization of the so dynamic world. So not the specific Japanese society of Japanese countries or Japanese government or those kind of things. How can we encourage the younger people to touch on a more diversified world? That's one of the key points. So at that time, what's the real position of Japan? I don't have any clear idea yet. But now I believe that Japan is the very good culture to harmonize with the society. Sometimes it means the weakness of Japan, but sometimes very strong of Japan. Those kinds of harmonized societies, culture, technology, or approach, I'd like to encourage it to be a very unique position of the world. I don't have any specific, you know, the number of the position of the world. I don't know. Sorry for that. Just to finish off, as a co-chair of the forum's annual meeting, the theme being, do you believe that we are capable of mastering the Fourth Industrial Revolution? Or do you think it is beyond our control? I'm a very optimistic person. Those Industry 4.0 or the Fourth Industrial Revolution will make the more safer, comfortable, and improve the futures. So that as a co-chair of these annual meetings, I'm very much supporting this type of approach for the mastering of the Fourth Industrial Revolution. Well, thank you very much. Arigato. Thank you very much.